Chinese Stocks Withstand Worst of Global Market Losses Amid Iran War

China's stock markets fell but proved among the most resilient in Asia this week as the war in the Middle East continued to roil financial markets. The annual meeting of the National People's Congress affirmed the nation's commitment to stability.

The benchmark Shanghai Composite Index ended at 4,124 on Friday, down 0.93 percent in the last five trading days, while Shenzhen Component Index dropped 2.2 percent and the tech-focused ChiNext lost 2.5 percent.

Hong Kong's Hang Seng Index fared worse, tumbling 3.3 percent to its sharpest weekly loss in four months. JD.com, China's largest retailer, reported a fourth-quarter loss, largely due to its fast food-delivery service and a decline in retail sales of consumer electronics. But the company also reported a 13-percent increase in 2025 revenue. Its shares in Hong Kong rose 4 percent for the week.

In comparison, Japan's Nikkei plunged 5.5 percent, and South Korea's Kospi slumped 10.5 percent.

"The rise in big Chinese mainland energy-related shares on higher oil prices balanced, to some extent, broader losses, but China's shares managed to stay relatively steady amid turbulent world markets," said Jiang Yifan, an analyst with Shenwan Hongyuan Securities.

PetroChina was a star performer this week, briefly claiming status as the Chinese mainland's most valuable listed company with a market capitalization of 2.14 trillion yuan (US$310 billion), but it ceded the title back to Agricultural Bank of China a day later. Its shares dropped 3 percent on Friday as profit-takers moved in.

Chinese officials stressed the importance of keeping capital markets stable in comments during the current twin meetings of the National People's Congress and its advisory consultative body. Wu Qing, chairman of the China Securities Regulatory Commission, said the Nasdaq-style ChiNext board in Shenzhen and STAR Market in Shanghai will soon introduce measures to make it easier for innovative startups to list.

At the congress, China set its 2026 growth target at between 4.5 percent and 5 percent, pledging to tackle weak consumer spending and a housing market slump. Policymakers kept the budget deficit target for 2026 unchanged from last year at around 4 percent of gross domestic product and set a 2-percent target for consumer inflation. Premier Li Qiang said budget spending would be "fairly large in scale."

"China's growth targets seem to be gentle, and we expect more targeted policies," said Song Yu, an economist at UBS. "One major mission is to increase consumption. China needs to give more support to technological innovation, encourage healthier competition and accelerate opening of its markets."

Elsewhere in global markets, oil prices continued to spike and Wall Street stocks plummeted on Friday as the Middle East war enters its second week. Benchmark Brent crude surged 9 percent to US$93.30 a barrel after Qatar's energy minister warned that prices could reach US$150 if the war continues for weeks, crippling global economies. The Nasdaq lost 1.6 percent and the broad S&P 500 was down 1.3 percent. For the week, the S&P 500 shed 2 percent and the Nasdaq declined 1.2 percent. In Europe, the Stoxx600 index fell 1 percent on Friday.